But with trade talks looming between the two countries next week, China has been keen to announce significant progress. In the last few weeks China says that 650,000 law enforcement personnel have carried out 4,000 arrests while investigating 2,000 cases of serious infringement with a financial value of around $350 million.

With the authorities promising harsher punishments, China has been getting tough with the physical side of piracy with the recent destruction of huge numbers of counterfeit DVDs and other products. A show of force on Monday saw the authorities conducting public book burnings in Beijing, Tianjin, Shanxi, Jiangsu, Guangdong and Sichuan, with a promise of more in the lead up to World Intellectual Property Day in April.

But increasingly it is the digital domain where piracy is running most rampant and up until now China’s actions have largely appeared limited to the physical world. That, apparently, is changing.

Just before the holidays there was an investigation by the authorities into 500 music download sites. The Ministry of Culture said that 237 of those sites (list) were suspected of illegal activities, citing a lack of licensing, failure to register and/or distribution of copyright infringing material.

On Monday the authorities issued a list of music – much of it from Universal, RCA, Warner, EMI and Sony – to be removed from sites by February 28th. The list features music from artists such as Eminem, Christina Alguilera, Kylie Minogue and KT Tunstall but isn’t particularly long. Indeed, many single DMCA takedown requests sent to Google by IFPI are substantially longer. That the government mentions “illegal music products” and “piracy” separately in respect of these products is sure to raise questions of censorship.

But music isn’t the only media being targeted or becoming the subject of self-imposed censorship online. According to a report this morning, China’s three leading YouTube-like video sites – Youku, Tudou, and Ku6 – have been deleting US TV shows and movies from their servers en masse.

Although Ku6 claims it has been deleting infringing content since 2009, the latest move comes as less of a surprise following the announcement last year that it had reached content deals with Hollywood studios Sony Pictures and Warner Brothers. This deal made Ku6 the first local site to acquire legitimate copyright content from major Hollywood studios and with 10% of the market in China, Ku6 has impressive potential.

Then last week, competitor Youku announced that it too had done a deal with Warner to stream the blockbuster Inception for the modest price of $0.75 per view, a move which resulted in company shares increasing by 6.6%.

No surprise then that hot on the heels of a fine for copyright infringement last November and their chase for legitimacy and access to more premium content, Youku has just implemented a YouTube-like filtering solution for infringing content.

However, removing huge amounts of pirate content and replacing it with increasingly expensive licensed fare is taking its toll on Youku. While the price of its content goes from zero to through-the-roof, the fees advertisers are paying the company remain static. Couple this with competition from sites still offering infringing, more attractive and zero-cost content, Youku have a serious problem if they can’t convince users to pay for premium content at prices that make sense.

“This is the worst kind of diseconomy of scale,” writes Business Insider. “The bigger Youku gets, the bigger its losses.”

When Barack Obama and Chinese leader Hu Jintao meet in the United States next week, the progress against music and video piracy will certainly add to the positive mood set by the earlier agreement for the Chinese to crackdown on software piracy. The road to legitimacy, however, will be a complex one for China’s markets but one that the US will be keen to see succeed.

Just don’t mention the J-20 or, in the content vacuum that’s likely to exist before all shows and movies become available legitimately, BitTorrent.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

At a hearing on the topic yesterday, many of the witnesses were sceptical of the claims and assumptions made by the affected US industries, including the MPAA and RIAA-commissioned reports. Harvard Business School Professor Fritz Foley called the basic assumption behind the industry loss figures into doubt.

“It seems a bit crazy to me,” PC World quotes him telling the Commission on the first day of the hearing. “To assume that someone who would pay some low amount for a pirated product would be the type of customer who’d pay some amount that’s six or 10 [times] that amount for a real one.” While some companies, such as EA (at times), don’t follow this ‘a copy equals a lost sale’ system, the majority do.

“Be careful about using information the multinational [companies] provide you,” cautioned Foley. “I would imagine they have an incentive to make the losses seem very, very large.”

Professor Foley’s comments reiterate what the Government Accountability Office told US congress earlier this year. There is virtually no evidence for the claimed million dollar losses. “Lack of data hinders efforts to quantify impacts of counterfeiting and piracy,” was one of the main conclusions from their report. In fact, copyright infringements may also benefit the entertainment industries and third parties, it argued.

An Intellectual Properly law professor at Drake University had another perspective. Pointing out there are two sides to economics, Professor Peter Yu noted that companies counterfeiting products in China may employ US workers, and consume US-sourced raw materials, so it’s not a straight loss. It’s similar to how VHS tapes were not the straight loss the movie industry predicted and claimed in the late 70s and early 80s. Yu also noted that it’s useful in spreading Western ideas to China, although how well lobbying will go down is anyone’s guess.

One of the best suggestions so far, however, came from Ohio State University law professor Daniel Chow. When asked how the size of the problem can be identified and quantified, he suggested that the agency should push the affected industries for more data, presumably data that backs up their claims (there is little-to-none available at present).

Professor Chow also noted that current enforcement efforts are not working (as we have previously reported), and that companies should start thinking about the long-term. It’s advice that the industries would be wise to follow, as every past copyright conflict has, despite a short-term loss, provided massive long-term benefits and growth for the affected industries.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

As demand grew Tony’s business expanded year after year, but by 2001 and although still busy, profits were being squeezed. By 2004 demand started to fall dramatically and in 2005 he had to close down his factory unit. Tony told TorrentFreak there was a new competitor in town.

“File-sharing, P2P – call it what you like. When you asked a customer why he wasn’t buying anything, 9 times out of 10 it was ‘BitTorrent this, LimeWire that’. Add that to the fact that huge numbers of PC users have burners and fast broadband and it’s obvious why I had to get out and earn a living another way. We had it good for a while but I don’t think those days are coming back.”

Cheap pirate media had just got even cheaper. With the advent of super-fast broadband there was little point in visiting the local counterfeiter when everything was just a few clicks away for free on increasingly user-friendly BitTorrent and other file-sharing sites. But what happens to the physical piracy market when the file-sharing sites are no more? Maybe China is about to find out.

During the last month Chinese authorities shut down hundreds of video sites, including some of the biggest BitTorrent trackers such as BTChina, for operating without an appropriate government license.

Now, according to a Chinese illegal DVD vendor, these shutdowns could be set to bring him and his competitors a sudden windfall – the exact mirror image of what happened to Tony several years ago.

“Pirated DVDs are the cheapest choice for people without free downloads online,” he said. “I expect my sales to triple before Christmas.”

While it’s still early days, officials in charge of clearing illicit vendors from the streets said that they had not yet witnessed a surge in demand for illegal DVDs. A spokesman for a Chinese IP lawfirm said that while there could be an increased demand short-term, file-sharers are resilient.

“Simply shutting down those websites might have an immediate impact, but where there’s a will, there’s a way,” he said. “The problem is, if you shut down the top two BitTorrent sites, then people are simply going to go to number three, number four or number five on the list,” he said. “You can cut off the head but sooner or later two more will grow back.”

Time will tell if an Internet crackdown on video sites will force customers back onto the streets, but perhaps more intriguing is the answer to this question – will it push them back into the arms of the legitimate vendors of movies and music? It seems unlikely.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Following the announcement came a two month investigation to ensure that sites were complying with the new rules – inevitably some fell foul. In March the authorities announced that dozens of websites would face penalties or be shut down for broadcasting material described as obscene, violent or fear-inspiring, or that could be detrimental to national security. Many were punished for simply not having the appropriate government certification.

Around a year later the government flexed its muscles again, shutting down more than 150 more video sites, bringing the total to more than 400 since the new regulations were announced.

In early November 2009, SARFT said it would continue cracking down on what it described as “unlicensed” video websites.

Continuing with its earlier justification, the government said it wished to provide a healthy environment for the country’s 200 million online video consumers, to eradicate what it described as lewd, obscene and violent content which had “severely undermined” the health of the country’s children. Although they weren’t initially mentioned, this time round authorities did included copyright issues as one of the reasons that the sites were to be closed.

Included in this swoop were several BitTorrent sites, including the very popular BT @ China. A notice on the site’s homepage explains that in the absence of an appropriate audio/visual license, the site has been ordered to shut down.

Another site, UUbird, which lists dozens of US shows such as Desperate Housewives, Prison Break, Heroes and Lost, said it would delete all links to TV shows and movies by mid-February.

As reported here on TorrentFreak a few days ago, BitTorrent is very popular China, with its main torrent client usage even surpassing that of uTorrent.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Less than a month after it was launched the office has already seized more than 4 million pirated teaching materials. As a result a massive 182 printing companies were shut down as well as 100,000 stalls where the illegal teaching materials were sold.

“The situation of illegal publications is generally under control… However, pirate issue is still obvious. Those pirated teaching materials especially harm the healthy development of the country’s youth,” Li Baozhong, vice director of the National Anti-Pornography and Anti-Illegal Publications Office, said at a press conference earlier this week.

Baozhong did not elaborate on how knowledge and education will harm children’s health, but we assume that it has something to do with content that the Government may not approve of. How educational materials could hurt one’s health remains a mystery though.

China is of course known for its censorship and notoriously blocks websites that may ‘harm’ its citizens including Wikipedia, YouTube, Flickr and Facebook. Interestingly, BitTorrent sites have never been targeted and almost all of the are still accessible today.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

It soon became apparent that VeryCD was not the only P2P website to be hijacked. A host of BitTorrent sites, including Mininova, isoHunt and The Pirate Bay were also affected. People in the Beijing area who attempted to access the sites were promptly redirecting to Baidu, China’s Google.

The domain hijacks continued for more than two days straight, but were lifted yesterday. According to some sources, there was never an attempt to censor the BitTorrent sites, claiming that a DNS error cause the problems. This doesn’t seem very plausible though, as the diversions almost exclusively involved P2P related sites, which are hosted right across the globe. Also, DNS issues can’t explain why all the P2P sites were suddenly redirected to another website.

Mininova co-founder Niek, whose domain was also redirected to Baidu told TorrentFreak: “We had the questionable honor of joining Wikipedia and YouTube on the list of websites that (at some point) were censored in China. Fortunately the people in charge made the right decision, and realized that blocking a search engine like Mininova wasn’t such a good idea.”

“I’m happy to see that the block is removed now, though it would be nice to talk to the people who made this decision so we can understand their motives,” Niek added. The true reason behind the hijack attempt will probably never come to light. Most importantly, the ‘problems’ are resolved now, and all BitTorrent sites are accessible again.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.